Cigarettes in Turkey

PROSPECTS

Increasing health and wellness awareness has a downwards pressure on the performance of cigarettes

In 2017, the government continued to inform its citizens about the harmful effects of smoking on health through public podcasts, which are mandatory on all TV channels. Additionally, non-governmental organisations that aim to curb smoking and help those smokers aiming at quitting also helped increasing overall health and wellness awareness among the population, which continued to have a downwards pressure on volume sales of cigarettes.

Increasing competitive pressure from fine cut tobacco negatively affects consumer demand for cigarettes

In 2017, an increasing number of smokers, especially younger ones, continued to switch to fine cut tobacco, which had a downwards pressure on volume sales of cigarettes. An increasing number of young smokers are switching to fine cut tobacco due to excise tax increases, which significantly increased the unit prices of cigarettes.

Existing restrictive regulatory framework and expected further restrictions will have a negative impact on the performance of cigarettes

The restrictive regulatory framework regarding sales and marketing of cigarettes continued to have a downwards pressure on volume sales of cigarettes in 2017. The government increased its inspections regarding regulations, ranging from the positioning of cigarettes in retailers to the smoking ban in open areas.

COMPETITIVE LANDSCAPE

International companies continue to outpace local companies

The competitive landscape of cigarettes continued to be highly consolidated in 2017, benefiting international companies such as Philip Morris, British American Tobacco, and JTI. These companies enjoy extensive distribution networks and extensive agreements with retailers in terms of shelf positioning and shelf space allocation for their own brands.

Company sales teams are the most critical aspect of their marketing strategies under a highly restrictive regulatory framework

The highly restrictive regulatory framework continued to significantly narrow down the marketing options of the leading companies. Within such a restrictive regulatory framework, the leading companies are forced to increase their investments in distribution and shelf-space positioning of their brands.

Over the forecast period, leading companies will increase their investments in low- and mid-priced brands

Due to macroeconomic deterioration, the price-sensitivity of Turkish consumers increased significantly towards the end of the review period. To sustain their sales, leading companies extended their product portfolios within the low- and mid-priced bands to target consumers with high price-sensitivity.

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